In the Summer Economic Forecasts released today, European Commission projects a deeper recession in Eurozone and EU in 2020, due to coronavirus pandemic. Because “lifting of lockdown measures is proceeding at a more gradual pace than assumed” in the Spring forecast, impact on the economy will be “more significant than anticipated.

Some highlights:

  • Eurozone GDP to contract -8.7% in 2020 (down from Spring forecast of -7.7%).
  • Eurozone GDP to grow 6.1% in 2021 (down from 6.3%).
  • EU GDP to contract -8.3% in 2020 (down from -7.4%).
  • EU GDP to grow 5.8% in 2021 (down form 6.1%).
  • Germany GDP to contract -6.3% in 2020 (down form -6.5%).
  • Germany GDP to grow 5.3% in 2021 (down from 5.9%).
  • France GDP to contract -10.6% in 2020 (down from -8.2%).
  • France GDP to grow 7.6% in 2021 (up from 7.4%).

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Valdis Dombrovskis, Executive Vice-President for an Economy that works for People, said: “The economic impact of the lockdown is more severe than we initially expected… If anything, this forecast is a powerful illustration of why we need a deal on our ambitious recovery package, NextGenerationEU, to help the economy.”

Paolo Gentiloni, Commissioner for the Economy, said: “The policy response across Europe has helped to cushion the blow for our citizens, yet this remains a story of increasing divergence, inequality and insecurity. This is why it is so important to reach a swift agreement on the recovery plan proposed by the Commission – to inject both new confidence and new financing into our economies at this critical time.”

Full report here.

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